Patel v Chief Medical Supplies Ltd, 2021 ABQB 355

Court of Queen’s Bench of Alberta Citation: Patel v Chief Medical Supplies Ltd, 2021 ABQB 355 Date: 20210506 Docket: 1501 00040 Registry: Calgary Between: Sam Patel, Shahir Patel, Bharat Patel, Manjula Patel, Dr. Moises Lasaleta and Elizabeth Lasaleta. Plaintiffs - and - Chief Medical Supplies Ltd., 1134853 Alberta Ltd., Hament Holdings Ltd., Harripaul Tulan Also Known as Paul Tulan, Jasoda Tulan and 2427419 Ontario Ltd. Defendants _______________________________________________________ Costs Decision of the Honourable Mr. Justice C.M. Jones _______________________________________________________ I.

Introduction [ 1 ] This costs application is the denouement of a long and hard-fought battle. The matter was in case management with now- retired Justice Hawco until I assumed carriage of it in its later stages. Before Justice Hawco’s retirement, the parties arrived at a settlement, but left open the matter of costs. [ 2 ] Despite the settlement, the Applicants seek solicitor client costs on a full indemnity basis or, alternatively, enhanced costs in respect of the entire Action from its inception. The Respondents argue that

Schedule C costs are appropriate and only in relation to three of the many applications brought during the course of this matter. II. Background [ 3 ] This matter arose as a dispute among the shareholders of Chief Medical Supplies Ltd. (“CMS”) and 1134853 Alberta Ltd. (“113”). [ 4 ] CMS specialized in the development and manufacture of dialysis fluids sold in Canada and internationally. At one stage, Paul Tulan (“Tulan”) owned 60% of the issued share capital of CMS through his wholly-owned holding company, Hament Holdings (“Hament”).

Shahir Patel and Moises Lasaleta each owned 20% of the CMS shares. [ 5 ] CMS operated out of a building owned by 113. It also leased space in Mississauga, Ontario from 2427419 Ontario Ltd.

(“242”), a company owned and controlled by Tulan, his wife Jasoda Tulan (“Jasoda”), and Merle and Barbara Olson. 60% of the issued shares of 242 were owned by another Tulan holding company, Paul Tulan Holdings (“PTH”). [ 6 ] At one stage, 50% of the issued shares of 113 were owned in equal proportions by Manjula Patel, Elizabeth Lasaleta and Jasoda.

A group consisting of Ashok Patel, Ramesh Patel and Girish Patel (the “UK Patels”) owned the remaining 50% of the issued shares of 113. [ 7 ] Unhappy differences arose between arose between the Patels and Lasaletas, on the one hand, and the Tulans, on the other. [ 8 ] The Originating Applicants in this matter were Sam Patel, Shahir Patel, Bharat Patel, Manjula Patel (the “Patel Group”), Dr. Moises Lasaleta and Elizabeth Lasaleta (the “Lasaleta Group”) and the UK Patels. The UK Patels subsequently ceased to be part of this matter.

The respondents to the Originating Application were CMS, 113, Hament, Tulan and Jasoda. [ 9 ] The Originating Applicants, minus the UK Patels, are the Applicants before me on this Application for Costs. The respondents to this Application for Costs are CMS, 113, 242, Tulan and Jasoda (the “Respondents”). III. Issues [ 10 ] Fundamentally, there are only two issues before me: the appropriate scope of costs and the appropriate scale of costs. [ 11 ] With respect to scope, the Applicants seek an award of costs for the entirety of this Action.

The Respondents assert that costs should be awarded to the Applicants only for the three interlocutory applications on which they were successful. [ 12 ] With respect to scale, the Applicants seek solicitor-client costs. They argue, inter alia , that the Court should consider alleged misconduct on the part of Tulan, both before and during the litigation. The Respondents oppose an award on this scale. They acknowledge that enhanced costs are appropriate for one of the Applicants’ successful interlocutory applications, but argue that only party-party costs are appropriate for the other two.

They assert that only litigation misconduct is relevant to enhanced costs and deny that there has been any such misconduct. IV. Analysis [ 13 ] As alluded to above, this matter has a long and complex history before the courts. That history, as it must, will inform my decision on the costs award. A. Scope of Costs [ 14 ] The Applicants take the position that they were successful in this litigation and point to Rule 10.29, which provides that a successful party is presumptively entitled to costs. 1.

Applications [ 15 ] The Applicants’ request for costs in respect of the entire Action necessitates some review of the totality of the proceedings. By my estimate, there were 16 applications filed. I will set out those applications very briefly here and discuss the resulting orders and decisions infra . [ 16 ] The first was the Originating Application filed by the Originating Applicants on January 8, 2015 seeking various relief, including the appointment of a Receiver-Manager for CMS and 113 and the substitution of new directors for the existing directors of 113.

This Originating Application was amended on January 15, 2015, June 15, 2015, June 30, 2015 and July 13, 2017, resulting in the Amended Amended Amended Amended Originating Application. The relief sought changed somewhat over the course of these amendments. With the first amendment, the Originating Applicants sought the appointment of an Inspector rather than a Receiver- Manager.

With the last amendment, the Applicants sought finalization of valuation of CMS and 113, repurchase of their shares of CMS and 113, repayment of outstanding shareholder loans and reimbursement for their contribution to the cost of valuation. [ 17 ] The Applicants brought a number of other applications as well. On July 27, 2015, they sought, inter alia , confirmation of a litigation plan and the appointment of an interim receiver/manager for CMS and 113. On May 2, 2018, the Applicants sought certain directions in respect of the valuation of shares.

On September 28, 2018, they sought a direction in respect of the payout period for their shares of CMS and 113. On November 6, 2018, they sought to strike an application brought by the UK Patels on October 24, 2018 in respect of a mortgage obligation. Finally, on January 11, 2021, the Applicants brought this application for costs. [ 18 ] The Respondents also brought a number of applications. On July 24, 2015, Tulan and Jasoda applied to have the Originating Application converted to an action by Statement of Claim.

On July 19, 2017, Tulan sought, inter alia , to require the Applicants to sell to him their shares of CMS and 113, to discharge the Inspector and to dismiss the Amended Amended Amended Amended Originating Application. On April 18, 2018, 113 applied for discharge of a certificate of lis pendens filed by the Originating Applicants against its land. On September 19, 2018, Tulan and Jasoda applied to have various items recognized in the valuation of CMS and 113. [ 19 ] In addition, an application was brought by the Inspector on November 14, 2018 for approval of its accounts. 2. Orders

[ 20 ] Justice Hawco heard the amended Originating Application on October 6, 2015 and issued his decision in Patel v Chief Medical Supplies Ltd , 2015 ABQB 694 (“ Patel #1” ).

He granted an Order dated November 2, 2015 implementing that decision by appointing an Inspector, whom he directed to, inter alia , obtain and examine the records of CMS and 113 and to “determine, inasmuch as he or she is able to do so, whether the Respondents or any of them have misappropriated corporate assets or resources of CMS or 113, and if so to what degree and whether the Respondents or any of them have usurped any corporate opportunities which ought to have been afforded to CMS or 113”. [ 21 ] Justice Hawco ordered costs in favour of the Originating Applicants on this application (the “Inspector Application”). [ 22 ] Justice Hawco issued four Consent Orders.

The first, dated January 19, 2016, appointed an Inspector and set out the process for the Inspector’s investigation. On March 16, 2017, Justice Hawco directed the Inspector to prepare a cash flow report in respect of CMS. Both of these Orders were silent as to costs. [ 23 ] On September 15, 2016, Justice Hawco sealed the Inspector’s Report dated July 8, 2016 and appointed Deloitte to determine the value of CMS and 113 (the “First Valuation”) with the cost to be borne by CMS at first instance.

He ordered the Applicants’ costs of this application to be determined at the conclusion of the matter. [ 24 ] On July 12, 2017, Justice Hawco sealed the Inspector’s Report dated July 10, 2017. He specifically stated that there would be no costs of this application. [ 25 ] On July 24, 2017, Justice Hawco gave a particularly important Order, his last in connection with this Action before he retired from the Bench. He ordered the sale of the Patel Group’s and Lasaleta Group’s shares of CMS and 113 at the mid-range fair value per share at September 30, 2016, as set out in the First Valuation Report.

He ordered that certain shareholders’ advances made by Bharat Patel and by Dr. Moises Lasaleta were to be repaid by CMS and 113. He directed Deloitte to undertake a new valuation of CMS and 113 as at September 30, 2014 (the “Second Valuation”) and ordered that, if the mid-range fair value per share of CMS and 113 in the Second Valuation was different from that in the First Valuation, the selling shareholders were to pay or be paid the difference, as appropriate.

The Second Valuation was to be paid for 60% by the Tulans and 40% by the Applicants. [ 26 ] Importantly, the July 24, 2017 Order contained the following statement: ...subject to the terms of this Order, the Amended Amended Amended Amended Originating Application of the Originating Applicants filed July 13, 2017, is concluded without any ultimate determination on the merits. [Emphasis added.] ( the “Non-Determination Language”) [ 27 ] This Order provided that Deloitte’s existing mandate as Inspector was completed but that it was to continue to monitor the ongoing affairs of CMS and 113 pending completion of the various matters set forth in the Order.

The Inspector was to report to a Justice of the Court upon the occurrence of: (

a) any extraordinary or improper event, (

b) any materially adverse event, or (

c) any event that materially adversely affected the Originating Applicants’ interests in 113 or CMS. Once all the terms of this Order had been fulfilled, the parties were to exchange mutual releases and, upon payment of its fees and costs, the Inspector was to be discharged. This Order provided that if the parties were unable to agree on costs, they could come back before the Court. [ 28 ] As noted above, I subsequently became Case Management Justice in this Action.

In that capacity, I have given five Orders. [ 29 ] On May 10, 2018, I dismissed both 113’s application for discharge of the certificate of lis pendens (the “CLP Discharge Application”) and the Applicants’ cross-application respecting the Inspector’s Report dated May 1, 2018. I ordered that the parties could address costs of that application when costs of the entire proceeding were considered. [ 30 ] On November 19, 2018, I adjourned the Inspector’s application for review of its accounts. On September 5, 2019, I made CMS and 113 jointly and severally liable to discharge those accounts.

Both of these Orders were silent as to costs. [ 31 ] As noted above, on September 19, 2018, Tulan and Jasoda filed an application to determine whether two specific properties were properly considered in the Second Valuation (the “Valuation Adjustment Application”). Tulan asserted that the Second Valuation overstated the value of CMS and 113 for share purchase price recalculation purposes. He argued, first, that a warehouse on 113’s property (“North Warehouse”) was upgraded by PTH. Second, he argued that CMS lost value on a building in Canmore (“Canmore Property”) due to a restructuring of the mortgage.

Also at issue was whether an alleged shortfall of $374,065 in connection with CMS’ investment in condominiums in Canmore should be reflected in the Second Valuation and treated as a debt of Sam Patel and Dr. Moises Laseleta to CMS. [ 32 ] Tulan was completely unsuccessful in that application. On October 1, 2019, I issued Patel v Chief Medical Supplies Ltd , 2019 ABQB 760 (“ Patel #3” ). [ 33 ] Finally, on January 15, 2020, I set the amounts owing to the Applicants for their shares of CMS and 113 and provided that the parties could speak to costs of the Action. 3.

The Applicants’ Request for Costs [ 34 ] The Applicants’ request for costs extends well beyond the three applications decided in their favour, being the Inspector Application, the CLP Discharge Application and the Valuation Adjustment Application (collectively, the “Successful Applications”). They seek costs for all steps taken in relation to the Action. [ 35 ] The Applicants note that, pursuant to Rule 10.29, a successful party is presumptively entitled to costs. Interestingly, that is the only time in their brief that they infer that they were successful.

Their brief makes no mention of the Non-Determination Language. Rather, after referring to Rule 10.29, they turn immediately to a discussion of factors they believe justify enhanced costs. Nevertheless, one of the issues before me is how important a determination of “success” is to the ultimate apportionment of costs. That level of success

must be assessed in light of the Non-Determination Language. [ 36 ] In the Amended Amended Amended Amended Originating Application, the Applicants made numerous allegations of misconduct against Tulan and Jasoda, the substance of which was that they wrongfully took control of CMS and 113 and appropriated corporate assets and opportunities to themselves. [ 37 ] As a result of Justice Hawco’s July 24, 2017 Order and, more specifically, the Non-Determination Language, the matter was concluded without trial and there was no final pronouncement in respect of these allegations. [ 38 ] The Respondents’ position is clearly articulated in their brief: Therefore, having chosen a settled compromise-avoiding the time, resources and uncertainty associated with a full trial – the Originating Applicants cannot now dredge up unproven allegations and treat them as proven for purposes of this Costs Application.

They chose to forego a trial of the issues. In these circumstances, there was no “winner” in the action. [ 39 ] The Applicants suggest their counsel only reluctantly agreed to the July 24, 2017 Order because Justice Hawco was leaving the Bench and some form of closure was necessary.

In argument before me on February 4, 2021, counsel for the Applicants stated: So, to characterize that as a negotiated agreement, the parties agreeing it – to settle it in some other way is just simply incorrect...To put this into context, Sir, and you’ll see this if you review the transcript of that appearance, Justice Hawco was retiring late that week...It was...it was basically, Hey, you got me. I’m seized with this and I’m aware of it, but you’ve got me for a week.

So if..if this is going to be done, it gets done today. [ 40 ] The inference the Applicants would have the Court draw is that the terms of the July 24, 2017 Order were not agreed, but were imposed on them. To that end, they cite Justice Hawco’s statement that, “...we’re not going to settle. It’s got to be imposed.” However, the Applicants neglect to mention that Justice Hawco was referring only to the time period for payment, not to the merits of the Action. [ 41 ] It is clear to me from the record that the July 24, 2017 Order was negotiated.

While it is not styled as a Consent Order and was not endorsed by counsel, neither was it appealed by either side.

In my view, it is disingenuous to argue that an Order that was not appealed and that specifically provides for no ultimate determination on the merits leaves the door open to a consideration of the merits for costs purposes. [ 42 ] Accordingly, I find that the Applicants cannot claim to have been successful in the Action as a whole when it was settled with no finding on the merits and, therefore, they cannot rely on Rule 10.29 to claim their costs for the entire Action. [ 43 ] The Applicants therefore must rely upon the Court’s general discretion to award costs pursuant to Rule 10.31, which is decoupled from success. [ 44 ] Rule 10.31 provides as follows:

(1) After considering the matters described in rule 10.33 , the Court may order one party to pay to another party, as a costs award, one or a combination of the following: (

a) the reasonable and proper costs that a party incurred to file an application, to take proceedings or to carry on an action, or that a party incurred to participate in an application, proceeding or action, or (

b) any amount that the Court considers to be appropriate in the circumstances, including, without limitation (

i) an indemnity to a party for that party’s lawyer’s charges, or (ii) a lump sum instead of or in addition to assessed costs. ...

(3) In making a costs award under subrule (1)(a), the Court may order any one or more of the following: (

a) one party to pay to another all or part of the reasonable and proper costs with or without reference to

Schedule C; (

b) one party to pay to another an amount equal to a multiple, proportion or fraction of an amount set out in any column of the tariff in Division 2 of

Schedule C or an amount based on one column of the tariff, and to pay to another party or parties an amount based on amounts set out in the same or another column; (

c) one party to pay to another party all or part of the reasonable and proper costs with respect to a particular issue, application or proceeding or part of an action; (

d) one party to pay to another a percentage of assessed costs, or assessed costs up to or from a particular point in an action. [ 45 ] Before making any award under Rule 10.31, the Court must consider the factors outlined in Rule 10.33, which provides:

(1) In making a costs award, the Court may consider all or any of the following: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered;

(

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct; (

h) any offer of settlement made, regardless of whether or not the offer of settlement complies with

Part 4, Division 5. [ 46 ] In principle, these Rules would permit me to award the Applicants their costs of the Action as a whole, notwithstanding the absence of a finding on the merits. The Respondents assert that this would be inappropriate. [ 47 ] While the various applications were discrete in the sense that they sought to accomplish different objectives, they devolved from a common factual matrix. Does this unifying influence make it reasonable to view the entire litigation as a continuum from the Originating Application to the execution of Mutual Releases?

Can the objectives of the various applications be viewed as steps along the path to an ultimate resolution, such that the totality of legal services incurred by the arguably successful party may be considered for purposes of a costs award? I think not. [ 48 ] The series of interlocutory applications did not set the stage for a trial at which the issues in dispute ultimately were decided. Some of the applications were contested and decided by the Court and some were dealt with by consent.

Accordingly, with the exception the Successful Applications, it is difficult to assess the contribution of any other proceedings to the overall resolution as reflected in the Order of July 24, 2017, and therefore the costs consequences that should devolve from those other proceedings. [ 49 ] While costs could have been sought for each application, it also could be argued that it would have been impossible to determine the appropriate costs consequences of any of these interlocutory applications until the matter was finally resolved at which point their contribution to an ultimate determination of the issues could be assessed and costs awarded accordingly.

The problem with that line of reasoning is that the Non-Determination Language expressly excludes such an ultimate determination. Consequently, I do not consider it reasonable to award costs using this kind of continuum approach. [ 50 ] The Respondents argue that I should assess each interlocutory application in the proceedings to determine who was the successful party in that application and what costs should follow. The alternative is to confine my analysis to the Successful Applications.

For the reasons that follow, I believe the latter is the correct approach. [ 51 ] I note that only three Orders expressly deferred the costs determination. The first was Justice Hawco’s September 15, 2016 Order, in which he sealed the Inspector’s Report dated July 8, 2016, appointed Deloitte to determine the value of CMS and 113 and directed CMS to bear the cost of the valuation at first instance. [ 52 ] Justice Hawco said costs would be determined in the cause.

As there was no determination “of the cause”, it follows that no costs are to be awarded in respect of this Order. [ 53 ] The second Order to be considered is my Order of May 10, 2018 dismissing both 113’s application to have a certificate of lis pendens discharged from its lands and the Applicants’ cross-application respecting the Inspector’s Third Report dated May 1, 2018. I ordered costs of that application to be addressed at the time costs for the entire proceedings were addressed.

The Respondents acknowledge that the Applicants were successful in connection with the CLP Discharge Application and should have their costs. [ 54 ] The third Order is mine dated January 15, 2020. I set amounts owing to the Applicants for their shares of CMS and 113 and provided that the parties could apply to the Court to speak to costs of the Action. [ 55 ] Thus, we have a series of Orders, most of which are silent as to costs. One says no costs are awarded.

Only three provide for future assessment of costs and only one of those, my Order of May 10, 2018, clearly reflects success by the Applicants. [ 56 ] Another problem with attempting to award costs in respect of a series of prior applications is that it can be difficult for one judge to assess the significance of applications heard by an earlier judge or judges.

[57] In SR v TR, 2020 ABQB 394, I noted that it can be difficult for a judge who was not involved in the totality of litigation tolook back and attribute relative blame/vindication or success/failure to the parties in applications heard by someone else. At para 14, Ioutlined certain factors that discouraged me from undertaking that retrospective analysis and that I believe are equally applicable here:

a) The difficulty of assessing the justification for the parties’ actions years after the fact and without any final determination as to theissues;

b) The subjective nature of assertions that one party took steps to intentionally marginalize another party out of spite or animosity;

c) The frailties of engaging in retrospective blame allocation in order to “do justice” if a party seeks such an outcome simply to provethey were right all along;

d) The purpose of an award of costs is indemnity, not a fine or other punishment;

e) Inferences to be drawn by a judge determining costs when one’s predecessors mostly chose not to award costs at the time, despitetheir immediate involvement with the file;

f) Concerns with the tactical nature of a decision to defer seeking costs until an action has been settled;

g) The unlikelihood of a failure on the part of the Court, the parties and counsel to address costs on an ongoing based being simply acollective oversight on the part of the Court, counsel and the parties;

h) Costs could have been addressed by the parties on an ongoing basis, but often were not;

i) Alleged inappropriate behaviour justifying an award of costs should be dealt with promptly to provide certainty to the parties and toavoid unnecessarily consuming more scarce resources, judicial and otherwise; and

j) Costs could, and should, have been addressed on an ongoing basis, by those familiar with the action and with the parties’ conduct inthe action. [58] Based on the foregoing, it seems appropriate to me to base a costs award at this stage solely on the Successful Applications. B. Scale [59] The Applicants seek costs on a solicitor and his own client full indemnity basis or, alternatively, on an enhanced basis.

Theirbasic premise is that the conduct of the Respondents, and Tulan more particularly, was so egregious that justice can be done only bymeans of an award of full indemnity costs. [60] The Alberta jurisprudence dealing with full indemnity or solicitor-client costs is very extensive.

The Applicants cite Jackson vTrimac Industries Ltd. (1993), (AB KB), 138 AR 161 (QB) and Secure 2013 Group Inc v Tiger Calcium ServicesInc, 2018 ABCA 110 and rely on alleged misconduct by the Respondents. [61] The Applicants’ litany of allegations in the Amended Amended Amended Amended Originating Application is reiterated inthe Application for Costs and includes oppression, fraud, misappropriation of CMS and 113 assets and opportunities and litigationmisconduct.

The Applicants level these allegations against the Respondents collectively and it is unclear what malfeasance can beattributed to 242, CMS, 113 and, to some extent, Jasoda, as opposed to Tulan. However, I need not concern myself with degrees ofliability of the Respondents. I believe I can award costs against them as a group, if appropriate, and leave it to them to determine theirproportionate shares. [62] The Respondents argue that an award of solicitor and own client costs is virtually unheard of except where provided bycontract and cite Luft v Taylor, 2017 ABCA 228.

Here, there is no contract, such as a Unanimous Shareholders Agreement, that mighthave spoken to responsibility for costs in the event of litigation. They also take the position that solicitor-client costs are not the norm. Iagree that both of these awards are exceptional. 1.

Pre-Litigation Conduct [63] A primary issue here is the extent to which a party’s pre-litigation conduct may be properly considered in respect of costs. [64] The Applicants’ position is that, prior to the commencement of this Action, Tulan engaged in egregious behaviour so harmfulto them that full indemnification is necessary for justice to be done: Tiger Calcium at para 15(b). They rely heavily on the Inspector’sReports and on comments from Justice Hawco in support of their position. a.

The Inspector’s Reports [65] The Inspector’s Reports were prepared pursuant to the Court’s direction and detail the alleged inappropriate conduct byTulan. The difficult question is the extent to which I may rely upon those reports in support of the Applicants’ request for costs giventhat there was no trial at which the Inspector’s assertions could be tested. I will review briefly the Reports and Justice Hawco’scomments thereon. i. The Inspector’s First Report [66] The Inspector issued a report on July 8, 2016 (the “Inspector’s First Report”), noting several concerns about Tulan and CMS,

including: 1. Financial support in the amount of $22.5 million dollars paid to related entities; 2. Net transfers of $4.3 million from CMS to PTH; 3. Transfers between CMS and PTH the reasons for which were unclear; 4. Payment of questionable management fees paid to PTH in the amount of $4.5 million; 5. Questionable lease arrangements between CMS and PTH in respect of property owned by 113; 6. Rent free use of property owned by 113; 7. Transfers and loans of funds from CMS to companies owned by Tulan, to his wife, to his son and to his brother; 8.

Guarantees by CMS and 113 of debt incurred by (Tulan) to finance acquisition of property owned by 242; 9. CMS supported the operations of 242 and Chief Medical Laboratories (CML) without which support 242 and CML would be unable to service a loan from the Bank of Montreal; 10. CMS provided financial assistance to related parties from cash flows and loans it obtained or guaranteed. Without CMS’s support, the related parties could not have carried on business; 11.

Tulan had transferred value from CMS to PTH, his wife and other related parties for his own benefit, for the benefit of his family and for the benefit of the shareholders of those related parties, to the detriment of the Patel Group and the Lasaleta Group. ii. The Inspector’s Second Report [ 67 ] In response to Justice Hawco’s March 16, 2017 Order, Deloitte issued a report on July 10, 2017 (the “Inspector’s Second Report”), outlining the Inspector’s findings from a 90-day analysis of CMS’ cash flow and discussing CMS’ financial performance for fiscal 2016 and fiscal 2017 to date. The findings included: 1.

Deteriorating financial performance by CMS; 2. Despite its deteriorating financial performance, CMS continued to provide financial assistance and support to related entities; 3. Despite declining revenues, expenses were increasing; 4. CMS was making rent payments to 242 on space CMS did not appear to be occupying; 5. CMS was paying 100% of property taxes for a facility in Mississauga which was inconsistent with the terms of its lease agreement; 6. CMS was purchasing equipment from PTH that was previously part of a lease agreement, effectively having CMS double pay for the same equipment; and 7.

CMS incurred credit card charges for what appeared to be non-business expenses paid for by CMS. iii. The Inspector’s Third Report [ 68 ] The July 24, 2017 Order required the Inspector to, inter alia , “monitor the ongoing business and affairs of CMS and 113 pending completion of [certain matters articulated in that Order]”. The Inspector issued its third report on May 1, 2018 (the “Inspector’s Third Report”) to update the Court on the Inspector’s activities since the Inspector’s Second Report and to report on a proposed financing (“BDC Financing”) of 242 by Business Development Bank of Canada (“BDC”).

Tulan had engineered this financing such that CMS and 113 were to be guarantors of a loan from BDC to 242. The Inspector’s Third Report concluded that the BDC Financing would increase 242’s debt by $6,350,000 over the previous loans, further encumbering CMS’ assets. iv. The Inspector’s Fourth Report [ 69 ] On November 14, 2018, the Inspector issued its last report (the “Inspector’s Fourth Report”) providing an update on the Inspector’s activities and seeking approval of the Inspector’s fees and its counsel’s fees. v.

Comments By Hawco J [ 70 ] As noted above, Justice Hawco heard the Applicants’ Amended Amended Amended Originating Application on October 6, 2015. While he agreed with the Respondents that appointment of a Receiver was not warranted, he did accede to the Applicants’ alternate request to appoint an Inspector. [ 71 ] In Patel #1, Justice Hawco made a number of findings critical of Tulan. The Applicants cite paras 21, 22, 25, 26 and 28: I have any number of concerns with respect to Mr. Tulan’s conduct. He has run all of the companies as if he were the only shareholder. Mr.

Tulan says that he had the tacit approval of the Applicants to run the companies as he saw fit I cannot accept that he would have thought that he had the tacit approval to falsify corporate records and provide false information to the Bank of Montreal in order to

obtain a $11 million loan. What Mr. Tulan certified to the Bank of Montreal was false. That loan has been secured by virtue of encumbering 113’s primary, if not sole asset, which is the 113 building. Both CMS and 113 are bound to guarantee the debt of Mr. Tulan’s personal company to the Bank of Montreal. I am further satisfied that there were sufficient inquiries and interest shown by the Applicants with respect to the original acquisition of the 242 building and the pharmaceutical equipment that made that acquisition by Mr. Tulan simply inappropriate.

CMS was in the business of providing pharmaceuticals. ... [Get-Away Dialysis Ltd.] is a company dealing with providing individuals with a high standard of dialysis treatment. CMS had earlier planned to expand their business in that area by offering travel dialysis. This is clear from the CMS records and has been admitted by Mr. Tulan. The acquisition of this company without bringing something or anything to CMS has resulted in a loss to CMS while Mr. Tulan or his company has made a profit in excess of $300,000. Notwithstanding the fact that it was agreed that no management fees were to be paid to Mr.

Tulan until the shareholder loans were repaid, those loans have not been repaid and yet Mr. Tulan has awarded himself management fees in excess of $1,800,000. ... Finally, I am also concerned that obtaining information and documents from Mr. Tulan has been fraught with difficulties. I am concerned that the Court is not in possession of sufficient information which would warrant granting the appointment of a Receiver or many of the other remedies set forth in s 242(3) of the ABCA.

It is clear to me that the Applicants’ interests have been unfairly disregarded. [ 72 ] At para 29, Justice Hawco directed the Inspector: ...to determine, in as much as he or she is able to do, whether Respondents or any of them have misappropriated corporate assets or resources and if so to what degree and whether the Respondents or any of them have usurped any corporate opportunities which ought to have been afforded to CMS or 113. [ 73 ] Finally, Justice Hawco restricted CMS’ and 113’s ability to borrow funds or to transfer funds to the individual Respondents. [ 74 ] Tulan appealed Justice Hawco’s decision, but the appeal was discontinued on a without costs basis. b.

Analysis [ 75 ] The conduct to which the Inspector’s Reports and Justice Hawco’s comments refer occurred prior to the litigation and, indeed, was the precipitating event for it. [ 76 ] The Applicants emphasize the following extract from para 15 of Tiger Calcium where the Court of Appeal summarized circumstances in which solicitor client costs may be appropriate:

a) When justice can only be done by a complete indemnification for costs;

b) When the misconducting party was “contemptuous” of the aggrieved party in forcing that aggrieved party to exhaust legal proceedings to obtain that which was obviously his;

c) Where there has been an attempt to delay, deceive and defeat justice, imposed the requirement to prove facts that should have been admitted;

d) Concealing material documents and failing to produce material documents in a timely fashion;

e) An attempt to delay or hinder proceedings, deceive or defeat justice, fraud or untrue or scandalous charges. [ 77 ] The Applicants argue that Tulan’s conduct meets these criteria and warrants solicitor-client costs.

They assert that Tulan’s conduct, pre-litigation and throughout the litigation, has been marked by deceptive behaviour, breach of trust, self-dealing and preference. [ 78 ] Specifically, they allege that the Respondents misappropriated shares of 113, failed to pay back shareholder loans owed to the Patels and Lasaletas, breached fiduciary obligations to CMS by usurping corporate opportunities, acted in conflict of interest by unilaterally causing CMS to enter into non-arm’s length transactions with Tulan or his companies, falsified corporate records to obtain a $15 million loan, pledged CMS and 113 assets to secure the loan, refused and delayed producing records that proved the loan fraud and used CMS for Tulan’s own personal benefit.

They cite the Inspector’s First Report, which described these actions in some detail. [ 79 ] The Applicants assert that Tulan’s efforts to borrow money for 242, a corporation in which they had no interest, constituted a breach of trust and included the preparation of false corporate documents.

The Applicants also allege that Tulan’s attitude toward them was contemptuous and point to his email of May 17, 2007 advising that they would not share in CMS’ growth or opportunities going forward. [ 80 ] However, the parties signed a Mutual Release settling all matters except costs: ...the Applicants do hereby remise, release and forever discharge the Respondents and any of their respective successors, predecessors, parents, subsidiaries, affiliates, shareholders and all their respective past, present and future directors, officers ... of and from any and all manner of action and actions, cause and causes of action, suits, ... sums of money ... and demands of every nature and kind whatsoever

up to the date of this release, except as expressly preserved below ... arising from any issue described in the Amended AmendedAmended Amended Originating Application of the Applicants filed in the Patel Action on July 13, 2017... ...this Mutual Release shall not impact the right or ability of any of the Parties to seek reimbursement of their legal fees anddisbursements incurred in connection with the Patel Action (the “Costs Issue”) and that such rights are expressly preserved as a carveoutto this Release. [81] Clearly, the Applicants sought to preserve the right to hold Tulan accountable for his alleged misdeeds through themechanism of a costs award, despite otherwise releasing him from liability.

Though they were not prepared to proceed to trial toestablish injury at the hands of Tulan and seek consequential damages, they seek to do so indirectly by making essentially the samearguments in the context of this costs application. [82] Citing Pillar Resource Services Inc v PrimeWest Energy Inc, 2017 ABCA 19, the Applicants argue that there is no validreason to distinguish between pre-litigation conduct and litigation conduct in respect of solicitor-client costs.

They quote from JusticeWakeling’s written reasons at para 122: Parties whose prelitigation acts demonstrate blatant disregard for the rights of an adversary engage in blameworthy prelitigation conduct.Only prelitigation conduct that is the basis of the action may be considered. [83] However, the other two Justices on that panel took the view that it is not appropriate to award solicitor-client costs for pre-litigation misconduct alone.

Justice Bielby stated at paras 7, 9 and 10: There is no authority from the Supreme Court of Canada that deals directly with whether full indemnity costs should be awarded for pre-litigation conduct alone. ... No authority has been offered which expressly deals with the issue of whether full indemnity costs may reasonably be awarded based onpre-litigation conduct alone. None have been offered which expressly address whether the “rare and exceptional circumstances”described by this Court in Sidorsky which justify an award of full indemnity costs include pre-litigation conduct without more.

Justice Wakeling is incorrect, at para 75 of his reasons for decision, to the extent he interprets the majority decision in FIC Real EstateFunds Ltd. v Phoenix Land Ventures Ltd., 2016 ABCA 303 as authority that pre-litigation misconduct may, on its own, formreasonable basis for full-indemnity costs. [84] At paragraph 153, Justice McDonald stated: I also agree with my colleague Madam Justice Bielby that the law does not permit a trial judge to base an award of solicitor-client costson pre-litigation conduct alone, independent of any other circumstances. [85] The Applicants also cite Polar Ice Express Inc v Arctic Glacier Inc, 2008 ABQB 194 at para 23: I conclude that the case of Young, supra in the Supreme Court of Canada and the decisions of Bielby J. in Rutherford, supra andAtchison, supra are persuasive authority for the principle that solicitor-client costs can be awarded for conduct of a party prior tolitigation which can be characterized as reprehensible, scandalous or outrageous.

My characterization of the Defendant’s conduct whichcaused the litigation as egregious and unlawful is a finding analogous to findings of reprehensible, scandalous or outrageous conduct andjustifies an award of solicitor-client costs in this case. [86] The Court also noted at para 10 that: The authorities cited by Stevenson and Côté and Greckol J. in M.E.B., supra make it clear that there is at least one exception to thegeneral rule stated by Veit J.: where the pre-litigation conduct is a breach of trust or fiduciary duties, solicitor-client costs may beawarded. [87] The general rule attributed to Veit J is found in Max Sonnenberg Inc v Stewart, Smith (Canada) Ltd ([19876), (AB KB), 48 Alta LR (2d) 367. [88] I note that Polar pre-dates Pillar and is a decision of this Court, while Pillar emanates from the Court of Appeal.

Therefore,Polar is not binding authority. Moreover, in Sonnenberg at p 80, Justice Veit stated: Costs and damages should not be confused. I subscribe to the views expressed in much jurisprudence, of which Olson v. New HomeCertification Program of Alta. (1986), (AB KB), 44 Alta. L.R. (2d) 207, 69 A.R. 356 (Q.B., Lutz J.), is an example,that costs deals with the conduct of the litigation and that damages deals with the conduct of the parties giving rise to the cause of action. [89] I agree.

I do not accept the Applicants’ assertion that the Respondents’ pre-litigation conduct affords a basis for a solicitor-client costs award. [90] Recently, in Haack v Secure Energy (Drilling Services) Inc, 2021 ABQB 82, my colleague Justice Woolley found that pre-litigation conduct was relevant to her decision to award solicitor-client costs.

She held at para 28 that “Rule 10.33(1) and case lawsupport the position that pre-litigation misconduct is relevant to determining the appropriateness of solicitor-client costs, even if notsufficient on its own to justify them.” [91] However, two aspects of the case before Justice Woolley distinguish it from this matter. First, in her decision on the merits ofthe case, she found, as she stated at para 36, “...that the Defendants’ pre-trial conduct was dishonest, abusive and oppressive, andrevealed a blatant disregard for the legal interests of Mr.

Haack.” At para 29, citing McAllister at para 38, Justice Woolley concluded

that “...the foundational principle that fairness requires that a successful party not bear its own costs of litigation ... has special significance when the successful party comes to court seeking a remedy for fraud, abuse of trust, dishonesty or oppression...”. [ 92 ] Second, Justice Woolley found that the defendants in her case had engaged in litigation misconduct as well, including taking unnecessary steps, failing to provide timely disclosure and advancing claims without meaningful evidence. [ 93 ] Justice Woolley concluded that the combined effect of the defendants’ pre-litigation and litigation conduct justified an award of solicitor-client costs in that case. [ 94 ] This case is significantly different for three reasons.

First, as discussed above, I do not think the Applicants legitimately can claim to be the successful party. [ 95 ] Second, while the Applicants claim pre-litigation misconduct on a scale comparable to that before Justice Woolley, their claims were not adjudicated and, therefore, we do not have judicially established fraud or oppression in this case. [ 96 ] Justice Hawco’s July 24, 2017 Order says the matter is concluded without any ultimate determination on the merits.

I do not believe this Court legitimately can award costs on the basis of Tulan’s alleged nefarious conduct when Justice Hawco expressly declined to make any such finding and warned the parties at the July 24, 2017 hearing that any further determination of Tulan’s alleged misconduct would require a trial. [ 97 ] Further, this costs application comes before me as Justice Hawco’s successor. While Justice Hawco made findings in Patel #1 of fraud, misconduct and misappropriation by Tulan and I mentioned his concerns at para 93 of Patel #3 , I have made no such findings.

I would go only as far as to note that Tulan may not have come before the Court with clean hands in light of Justice Hawco’s earlier determinations. [ 98 ] Justice Hawco’s findings of inappropriate actions by Tulan seem at odds with the Non-Determination Language and some effort needs to be made to reconcile them. Perhaps the resolution of any apparent contradiction is to be found in the use of the word “ultimate”.

In Patel #1 , Justice Hawco made what might be characterized as a preliminary determination, based on the record then before him, which did not include viva voce evidence, though the transcript of Tulan’s Questioning on August 5, 2015 would have been available.

Justice Hawco could not have thought his comments in Patel #1 represented the last word on issues of misconduct or he would not have stated in the hearing before him on July 24, 2017 that resolution of those issues would require a trial if the parties did not settle. [ 99 ] I find that the Applicants were willing to accept the absence of any ultimate determination of their assertions of misconduct in order to effect a settlement.

I believe it would be an abuse of process to allow them to walk back from that position in support of a request for something as exceptional as full indemnity costs. [ 100 ] The third reason I find that this case is different from that before Justice Woolley is that, as detailed below, there has not been litigation misconduct that would justify solicitor-client costs. 2. Litigation Conduct [ 101 ] The Applicants take issue with Tulan’s conduct of the litigation. The essence of their complaints is set out in their brief: ...Tulan was more than aware that the allegations against him were well-founded.

He knew that he had done what he was being accused of having done. His decision to contest that, and force the Applicants to prove every point, was a choice. A choice to delay and avoid Court intervention, or at least force the Applicants to exhaust legal proceedings. ... The Action was filed 6 years ago and forcing payment after the second valuation consumed enormous legal, Inspector and Valuation resources.

It was all caused by the Respondents’ actions, first in undertaking the improper actions outlined in the First Inspector’s Report and then through choosing to fight and delay every step of the way in this litigation, denying the mountain of facts they knew to be true. This allowed the Respondents to avoid paying the full amounts owing for the shares for years and years, and has created a situation where justice can only be done by awarding indemnity costs. [ 102 ] The Applicants claim Tulan’s behaviour falls squarely within the factors outlined by the Court of Appeal as justifying solicitor- client costs.

They characterize Tulan’s defaults as “failing to produce documents in a timely fashion” and “blameworthiness in the conduct of litigation” and assert that indemnification is necessary for justice to be done. [ 103 ] In their brief, the Applicants go into considerable detail respecting the alleged litigation misconduct.

They point to Tulan’s failure to be forthright when questioned, alleging that his evidence regarding CMS’ investment in AVL was contradictory, that he gave false evidence relating to his involvement in the travel dialysis business and that he acknowledged involvement with that entity only when confronted with a corporate search. [ 104 ] The Applicants accuse Tulan of deliberately misleading them and the Court when he sought to avoid the Second Valuation.

The Applicants claim that he misstated advice from Deloitte as to whether the Second Valuation might be materially different from the First Valuation and refused to correct his evidence on cross-examination. [ 105 ] The Applicants allege that Tulan refused to pay an outstanding balance for the First Valuation, claiming incorrectly that the Applicants owed 40% of that account. He also took steps to delay completion of the Second Valuation. He sought to have the Second Valuation altered to reflect certain items and to have the certificate of lis pendens discharged from the 113 lands before the Second Valuation.

As noted above, I dismissed both of those applications. [ 106 ] The Applicants assert that the Respondents took unnecessary steps in the litigation. They note that the Respondents appealed

Justice Hawco’s November 2, 2015 Order, argued a stay application before the Court of Appeal and abandoned the appeal only after the Inspector’s First Report was released and the Patels and Lasaletas had filed a fresh evidence application. [ 107 ] The Applicants also point out that Tulan filed a parallel Action seeking damages against the Patels and Lasaletas allegedly based on the same events. They claim that this parallel Action was not pursued diligently.

The Applicants filed an application to dismiss it in April 2019, cross-examinations ensued and the parties recently agreed that it would be dismissed without costs. [ 108 ] The Applicants proffer various examples of Tulan’s alleged attempts to delay, deceive and defeat justice. They claim he delayed delivery of documentation required by Deloitte for the Second Valuation and failed to pay the full cost thereof as required under Justice Hawco’s Order of July 24, 2017. Similarly, they accuse the Respondents of delaying or refusing to produce records to them, the Inspector and the Valuator.

They emphasize that Justice Hawco was concerned that they could not get information or documents from Tulan. [ 109 ] The Respondents note that Tulan’s appeal of the decision to appoint an Inspector and his application to convert the Originating Application into an action by Statement of Claim were discontinued with the consent of the Applicants on a without costs basis.

Their position is that those two matters should be excluded from any consideration of enhanced costs. [ 110 ] The Respondents dispute the Applicants’ assertion that Tulan engaged in a strategy of delay and take the position that he was entitled to challenge the methodology and premises underlying the Inspector’s Reports and the Valuations. [ 111 ] The Respondents challenge the Applicants’ claim for enhanced costs on the grounds that Tulan was not forthright, asserting that the Court never made a finding on Tulan’s credibility and that such a finding should not be made without viva voce evidence.

Further, the Respondents argue that a lack of credibility factors into a trial decision and does not justify a greater costs award: Pillar at para 157. [ 112 ] The Respondents claim that the work performed by the Inspector over the course of the lawsuit was not useful for the ultimate resolution of this matter. Rather, the valuation process determined amounts payable to the Applicants for their shares of CMS and 113.

However, this ignores the fact that this matter was resolved by a Court ordered share sale that arose from the Inspector’s investigation into Tulan’s alleged misdeeds. [ 113 ] Taking all of the foregoing into account, I find that Tulan did not engage in reprehensible conduct during the litigation.

Challenging the Inspector’s assertions of malfeasance and disputing the parameters used by the Valuator does not amount to litigation misconduct justifying full indemnity or solicitor client costs. [ 114 ] Though I was not involved in all of the applications in this matter, my review of the file and the applications I heard lead me to conclude that Tulan did no more than vigorously defend the assertions against him and hold the Applicants to strict proof of those assertions. [ 115 ] Accordingly, I find that neither solicitor-client nor full indemnity costs is warranted.

The Applicants shall have their party-party costs of the CLP Discharge Application and the Valuation Adjustment Application. As noted the Respondents accept that enhanced costs are appropriate for the Inspector Application to reflect its complexity. The remaining question is how those costs should be computed. C. Assessment of Costs [ 116 ] The Respondents assert that the normal rule is to award costs on a party and party basis, which is intended to provide partial rather than full indemnity.

They propose an aggregate costs award of $51,975 in respect of the Successful Applications, which includes enhanced costs for the Inspector Application to reflect its complexity. [ 117 ] The Respondents argue that there is a presumption that costs should be assessed according to

Schedule C to the Rules. They cite Geophysical Service Incorporated v Falkland Oil and Gas Limited , 2020 ABCA 106 at para 4 : The respondent argues that costs should not be set based on

Schedule C, but rather should be set based on a percentage of the solicitor and client costs incurred by the respondent. In Alberta, although the courts have a wide discretion, the presumption is that costs are set in accordance with

Schedule C. The amounts in

Schedule C are designed to reflect only a portion of the solicitor and client costs that will generally be incurred. The actual proportion recovered may vary widely, but attempting to fix costs as a percentage of solicitor and client costs would lead to uncertainty, and generate more litigation about the quantum of costs... [Emphasis added.] [ 118 ] More recently, however, the Court of Appeal issued McAllister v. Calgary (City) , 2021 ABCA 25 , in which they stated at para 28 that

Schedule C is the not “default rule” and characterized it at para 29 as “...merely one of a number of options or tools that may be used to achieve the outcome of reasonable and proper costs under Rule 10.31(1)(a).” [ 119 ] The Respondents assert that there is no longer any concern that

Schedule C is outdated given its recent update. I agree that recourse to

Schedule C is perfectly acceptable. However, the Court of Appeal in McAllister at paras 53 and 62 made clear that it is only one of the tools available and that failure to look beyond it is an error in law: As the majority in Boyd v. JSB Foods Canada Inc. , 2015 ABCA 191 stated at paragraph 4 : “Schedule C is not a standard or starting point. A judge or master need not use it at all”; or as was noted by this Court in Hill : “[w]e must keep in mind that

Schedule C is a purely-optional rubber stamp for a judge, who may use it or not, or amend it as he or she sees fit”...

Schedule C, while not properly considered a guideline or standard when assessing what constitutes an appropriate level of indemnification, is nevertheless a valuable tool that may effectively be used by trial judges in a variety of situations to make a reasonable and proper costs award. [ 120 ] Thus, the Court of Appeal has made clear that the underlying objective that guides the Court’s approach to costs awards is to

provide an appropriate level of indemnification using the tools available. [ 121 ] In this case, I am concerned about using

Schedule C as the basis for a costs award, notwithstanding its recent amendment. First, the Inspector Application was heard by Justice Hawco and is acknowledged by the Respondents to have been complex. That being the case, I am ill-equipped to determine which line items in

Schedule C are applicable. [ 122 ] More to the point, the Applicants and Respondents were evenly matched in terms of financial resources, access to legal advice and motivation to succeed. They were incurring legal costs within the same geographical region. There was no reason to think one party's legal costs were disproportionately high or low due to regional variations in fees. [ 123 ] The parties were equally capable of assessing litigation risk.

This is reflected in the settlement effected by the July 24, 2017 Order, which put an end to an action that otherwise would have required a trial with its inherent uncertainties. [ 124 ] Accordingly, I find in this case it is preferable to use the percentage of assessed costs method. [ 125 ] As the Court of Appeal noted in McAllister at para 41 , the weight of authority in Alberta is that party and party costs normally should represent partial indemnification of the successful party at a level of approximating 40-50% of actual costs; see, for example, Hill v. Hill , 2013 ABCA 313 at para 11 .

However, the Court of Appeal noted in McAllister at para 51 that the Court’s discretion to move up or down from that level having regard to the factors in Rules 10.33 and 10.2(1) remains intact. [ 126 ] Of course, the chosen percentage of indemnification is to be applied to reasonable costs reasonably incurred: McAllister at para 46 . The Respondents correctly point out that a successful party entitled to solicitor-client costs has a prima facie duty to demonstrate that they are reasonable and necessary or prudent: Luft at para 78 .

I am satisfied that the same applies to party-party costs awarded on a percentage indemnification basis. [ 127 ] The Respondents point out that the Applicants have refused to provide them with information regarding their accounts. The Applicants state that their legal bills total just under $800,000 and that they have incurred additional payments to the valuator of just over $100,000. [ 128 ] At the hearing before me, counsel for the Applicants suggested that “I could simply say, I -you know, the number are roughly [$900,000] and change.

I deduct some amount for the Court of Appeal and the parallel action, deduct some amount if it strikes Your Lordship as fair and reasonable, and then set a number”. [ 129 ] This approach does not seem consonant with partial indemnification of reasonable costs reasonably incurred. Without examining the Applicants’ legal bills, it is impossible to determine if the amounts paid for legal services were reasonable and if those services were performed in the context of the relevant proceedings.

Bluntly put, what the Applicants propose is tantamount to “pick a number”. [ 130 ] Fortunately, there is a readily available means of conducting just this kind of examination. The Review and Assessment Officer makes these assessments on a daily basis, with or without the assistance of this Court as required. He is familiar with the litigation process, with what is or is not reasonable in the circumstances and with the rates charged for legal services.

His procedures will protect against the unnecessary abrogation of solicitor-client privilege through redaction of accounts. [ 131 ] I find that a review of the Applicants' accounts by the Review and Assessment Officer is necessary and entirely appropriate. With appropriate direction from this Court regarding parameters, he will be well equipped to provide a meaningful assessment of the need for and reasonableness of the legal services engaged by the Applicants. This Court will remain available to provide him with further direction should he so request it.

Furthermore, the parties, if dissatisfied, can appeal his decision to this Court. V. Disposition [ 132 ] As discussed above, party-party costs normally are meant to approximate 40-50% of actual fees incurred but can be adjusted up or down if appropriate. [ 133 ] With respect to the CLP Discharge Application and the Valuation Adjustment Application, I award the Applicants 50% of their assessed solicitor-client costs. [ 134 ] As already noted, the Respondents acknowledge that the Inspector Application was complex and warrants enhanced costs. I note that Rule 10.33(1)(

d) permits the Court to take into account the complexity of a matter. Accordingly, I award the Applicants 75% of their assessed solicitor-client costs. [ 135 ] If the Review and Assessment Officer, in consultation with the parties, is unable to agree on the scope of legal services, disbursements or other costs properly engaged in connection with those applications he may approach me for further direction. [ 136 ] If the parties cannot agree on costs in respect of this Application they may make written submissions to me within thirty days of the date of this Decision. Dated at the City of Calgary, Alberta this 5 th day of May, 2021.

C.M. Jones J.C.Q.B.A. Appearances: Robert Hawkes Q.C. for the Applicants Andrew Sunter for the Respondent s